The present invention relates to a method for transacting cargo insurance business on-line. More specifically, the present invention relates to a method for automatically quoting, issuing, and supporting a cargo insurance policy on the internet, as well as the processing of insurance claims from first notice of loss to settlement of claim.
For purposes of this application, “on-line” refers to any transaction occurring on a network such as a LAN, WAN, Intranet, VPN (Virtual Private Network), etc. As an example, the network may be the Internet.
The cargo insurance business encompasses a wide variety of information exchanges with prospective and active customers, as well as extensive support functions for the insuring process. In a preferred embodiment the customer uses a computer, PDA (personal digital assistant), or other networking device to access the inventive system. As an example, this networking device may use existing web-browser software to access a known URL corresponding to a website providing the inventive system.
For example, typical customer interfaces include:                Requesting quotes for open policies and individual shipment insurance;        Purchasing and payment of shipment insurance;        Issuing insurance certificates;        Voiding certificates;        Filing a claim;        Checking the status of a claim; and        Customer service.        
These “front office” functions also require “back office” support functions, including:                Data-feeding of customer data;        Performing pre-qualification of customers;        Underwriter referral capability;        Interfacing to accounting departments;        Quote calculation;        Decision to reinsure;        Reinsurance accounting;        Automated notification of various parties when a claim is submitted against a certificate;        Subrogation process tracking; and        Claim adjustment.        
Moreover, additional customer support functions can be provided, to assist the customer throughout the process. Examples of this type of support function include:                Instructing the customer regarding claim documentation;        Instructing the customer when data inputted is invalid;        Providing the customer with a list of available surveyors when they report a loss; and        Providing the customer with information regarding his shipment responsibilities.        
It is also desirable to generate management reports, such as profitability with respect to commodity, customer region, etc., and also to have claims data reporting capability.
Furthermore, a cargo insurance system should have the ability to analyze the data provided by customers to identify potential problems with shipments or claims. This functionality can be used in the following situations:                Evaluating claims to ensure that dates fall within the legal statutory time limits; and        Red-flagging high-risk commodities and ports to ensure that loss control is able to take preventive measures against loss.        
Therefore, an all-encompassing cargo insurance system should include both the underwriting and the claims processes. Importantly, this type of system can be automated, and can be made available on an insurer's website or other point of entry. A fully automated on-line system of this type would have the features summarized below.
Underwriting Process
The underwriting process is composed of five major steps:                1. Quote creation        2. Billing        3. Certificate issuance        4. Reinsurance        5. Loss Control        
Quote Creation                a. The quote creation process is initiated when a user, preferably a business to-business exchange, accesses the insurer's system application, via a website or other point of entry, to inquire about the insurer's cargo insurance rates. The system requires that users subscribe to the site before any quotes can be generated. Subscription takes place immediately, and only requires very minimal customer information, such as name, company name and email address. When a user goes through the subscription process, any customer data that can be downloaded from the exchange is downloaded. This data will then be used to minimize the amount of data entry required in the creation of documents.        b. When the login process is completed, the system performs a small pre-qualification check, where customer claims and premium payments records are accessed. The system will have the ability to reject some customers, based on data regarding past behavior that may indicate a high rate of claims or unpaid premiums.        c. The quote creation process continues, with data input by the user of information regarding commodity, departure and arrival locations, mode of conveyance, estimated departure date, invoice value, amount insured and currency. Based on the transactional information provided by the user, or the business-to-business exchange, the system performs the quote calculation.        d. The customer can review the quote information provided by the system, and make data modifications while in the quote screen, to see whether changes in the deductible amount or shipment locations can result in a cheaper rate.        
Billing
The billing process is initiated when a user accepts a quote that was provided by the system. The system captures all relevant payment detail information, but payment is not processed until the user agrees with the terms of the insurance contract. If the billing process is completed successfully, the insurance certificate can be issued.
Certificate Issuance
The certificate issuance process starts with a system verification of the data that was provided up to that point. If any required data is missing, the user is asked to complete it. The user is then asked to review the terms and conditions of the contract, as well as the data inputted. The user can change any piece of data that does not affect the actual rate that was provided with the quote. If the user changes one of these key fields, the system will have to redo the quote calculation, and the user will receive a warning message. When all terms and conditions are accepted, the payment is processed, and an electronic certificate of insurance is issued. A follow up hard copy of the insurance certificate will be forwarded to the customer, if necessary.
Reinsurance
When the transaction amount is large, there may be a need for the insurer to reinsure part of the certificate value. If this is the case, the system will automatically evaluate the percentage of reinsurance required, as well as the percentage allocated to each re-insurer.
Loss Control
The underwriting process ends with an evaluation by the system of the loss potential, based on commodity and port locations provided by the customer. If there is a high loss potential for this particular transaction, a loss control agent will be contacted by email.
Claims Process
A claim can follow two different basic flows, based on the loss amount reported by the user. While the regular process requires a period of investigation and the creation of a reserve, a fast track claim may be paid automatically by the insurer, after all required documentation has been provided.                e. Once the user has completed a claim notification, the system initiates a series of automated actions:                    1. The user is provided with a list of documents that will be required to process the claim.            2. A series of notification emails are sent to the claims representative, the underwriter, loss control, and the recovery department, based on such factors as amount of the claim, type of loss and statutory time limits.            3. If there was reinsurance on the particular transaction, the various re-insurers are also contacted.                        
In the case of a fast track transaction, or when the investigation process has indicated that the claim is acceptable, the claim is adjusted and paid. If the claim is for more than a certain amount, the file is sent to recovery.
Accordingly, it is an object of the present invention to define a method for automating an on-line system for transacting cargo insurance business, including all the features heretofore described.